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Telecom companies have long been a favorite among income investors thanks to their utility-like business models, which make for steady cash flow and allow for generous, secure, and slowly growing dividends (learn about the best sectors for dividend income here).

With global interest rates at their lowest levels in human history, it’s understandable why high-yield seekers might be attracted to Centurylink Inc (NYSE:CTL) and its 7.7% yield, which is one of the highest in the telecom industry and broader market.

But always remember that if something seems too good to be true, especially in the world of investing, it usually is. Let’s take a closer look at this regional telecom for consideration in our Conservative Retirees dividend portfolio and see just why the market is discounting its shares enough to create this sky-high yield.

More importantly, find out if AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ), and Comcast Corporation (NASDAQ:CMCSA) are likely to be better telecom choices for dividend growth investors to own in the coming decades.

Business Description

Founded in 1968 and headquartered in Monroe, Louisiana, CenturyLink is the nation’s third largest landline phone company. It serves 11 million, 6 million, and 285,000 phone, internet, and subscriber TV customers, respectively, in 37 states.

In addition, thanks to its $2.5 billion acquisition of Savvis Inc in 2011, the company also operates over 50 cloud computing data centers in North America, Europe, and Asia.

In its most recent quarter the internet business, which the company refers to as “strategic services,” comprised 49% of its revenue, with 33% coming from its legacy landline business and the remainder from its data integration, and hosting (cloud computing) segments.

Business Analysis

As you can see below, CenturyLink has been struggling for years with falling sales in its legacy landline phone business. Over the last two years, “Legacy services” revenue has dropped 15%.

With the rise of wireless phones this is a trend that is likely to continue, putting major pressure on the ability of the company to grow its overall revenues, earnings, and cash flows.